I think the most important number in this article is " 67% surge of card spending over last year in the seven days ended April 3".
They're taking a single week of spending, compared to a time when people were under serious threat of losing their income, and full of fear, and from that one number, they suggest that we've entered a boom cycle.
I'm not an economist, but I don't think the person who wrote this should be able to call themselves one either.
If they're going to go by this number, how about also including the numbers for 2019? Is the economy back to where it was? higher than it was then?
A major boom takes more than just stimulus from the government, otherwise, they'd just constantly be printing money.
I'd like to see reasoning behind the "boom" that is coming, beyond just that people are back spending money. That "should" only get us back to "normal".
> Credit card debt hit $1 trillion for the first time on record
Careful folks, I think this is a headline designed to grab attention while not meaning much.
Specifically, I don't think that was adjusted for inflation and population growth, which means nobody did any due-diligence to ensure the number represents a significant new high record.
The graph of source data [0] doesn't suggest either of those factors were considered, and the last peak in 2020 of 0.858t would be (after inflation) something like 1.015t now, so we haven't yet "caught up" to that prior peak.
I mean, FFS, imagine that on January 1st a bunch of news outlets exclaim "2024 NOW THE LARGEST A.D. YEAR IN RECORDED HISTORY!" Technically true, but c'mon, seriously?
I think the author is cherry-picking numbers to support her thesis. In any case, here are some opposing views:
U.S. consumer spending surged 0.9 percent in March, the biggest gain in nearly a decade, as inflation pressures remain non-existent.
The March gain in US consumer spending was the biggest monthly increase since August 2009, the Commerce Department reported April 29. while inflation rose just 0.2 percent and has risen only 1.5 percent over the past 12 months.
Average hourly earnings in April were 3.2 percent higher than a year earlier, the ninth straight month in which growth topped 3 percent, the Labor Department
> Consumers wouldn't be spending if they didn't have extra cash in their pocket, and they expect the economy to stagnate/decline
Cash... or credit. Americans currently hold around $3.6 trillion in credit cards and auto/student loans - those types of credit can hinder long-term growth.
And the CCI is not a predictive metric. Consumers don't consider the economy in their purchasing decisions unless the media has given them reason to be concerned... if they're even paying attention to news at all.
I'm also curious how CCI is influenced by lowering expectations - if populations have been struggling to find jobs for the past 4 years, how do people answer?
Thank you! The charts really bothered me and this shows that the article is portraying the trends a little more aggressively than they really are.
I still think having only two data points (one during the Great Recession and one in 2018) reeks of cherry picking. I’d like the author to have provided more historical data to demonstrate the effect.
I don't want to be the "did you even read the article?" guy, but I do recommend you all read the article or get more context about this first before posting what could be considered a economic/political "hot take". It's really a mix of optimism (like some relief from recession fears, for now) and concern (like lower personal savings rates).
Don't extrapolate too much based on a single quarter metric (albeit an important one). That's the HN way.
“Going forward, the consumer’s not going to spend at the same rate, the government is not going to spend at the same rate, and businesses seem to be slowing down their spending as well,” Arone said. “This suggests this might be the peak GDP figure, at least in the next few quarters.”
These figures are from before things like student loan repayments kicked in.
> It seems like this is a month to month number that fluctuates widely based on one-off events and things like when people typically pay their taxes.
Even if it varies a lot over the short-term, reaching positive numbers after a long period in the negatives would suggest an upward trend that isn't just noise.
Could you link something that supports your opinion?
As for me: US consumer confidence surges in August to 18 year high. https://www.theguardian.com/business/2018/aug/29/us-economy-.... Consumers wouldn't be spending if they didn't have extra cash in their pocket, and they expect the economy to stagnate/decline
> And, if you look at inflation-adjusted metrics, that growth is very minor.
Baloney. Take a look at a graph of US federal deficit as a percentage of GDP. In 2018 the deficit was 3.8% of GDP, in 2019 it's expected to be 5.1%. If those were the values during a recession, that would be understandable, but during what is supposed to be a "great, amazing" economy, those structurally high values is what scares people.
"Peak restaurant" is in the peak boom years of 1999-2000 and 2007-8. What's interesting is that it hasn't recovered even though the economy nominally has. This lends credence to the "unequal recovery" theories, that although growth is up and unemployment appears to be down people don't actually have nearly as much spending money.
Could you point to the part of the paper that you're drawing these conclusions? It's been a while since I've done serious econ work, but I'm not seeing a spending variable when I scan through the paper.
> As you can see, UK spending is skyrocketing. The rate of increase between 2010 and 2019 is 2,000% higher than France's, as originally claimed.
I'm still not seeing it, what are the actual digits you are you math-ing in order to get 2000%? Are you sure you aren't comparing two different time ranges?
Because putting both country-lines on on the same 2010-2019 graph doesn't show anything too shocking:
> For most people growth means that the economy is getting better and recession means that the economy is getting worse.
That's a fine shorthand, but the reason the standard data and interpretation of it matters is that otherwise all you have is what people feel about the economy, which is not very useful information.
> The economy as a whole is doing well, but people aren't
Yeah, that means your measurement of "the economy" is lying. And that you are in a recession.
There's no mixing of technical and colloquial terms here. All that is there is a lying indicator. And if people insist that incorrect number is real, those people are lying too.
We all only have a coinflip chance of inferring tone online so I wouldn't feel bad. It's also possible I misinterpreted both your comment and the OP to a degree.
There's a lot of politically driven economic boosterism in the air right now (more than usual even) and I may have lazily assigned you to that camp with scant basis.
It's natural for politicians and their adherents to cherry-pick the data and intentionally withhold context on it to make themselves look as good as possible, while their opponents do the reverse. Then everyone accuses the other side of ignoring their numbers which they say are the true reflection of "reality."
Ever was it thus, but it's more exaggerated in these conditions where both the "good numbers" and the "bad numbers" break records and can zig-zag suddenly.
They're taking a single week of spending, compared to a time when people were under serious threat of losing their income, and full of fear, and from that one number, they suggest that we've entered a boom cycle.
I'm not an economist, but I don't think the person who wrote this should be able to call themselves one either.
If they're going to go by this number, how about also including the numbers for 2019? Is the economy back to where it was? higher than it was then?
A major boom takes more than just stimulus from the government, otherwise, they'd just constantly be printing money.
I'd like to see reasoning behind the "boom" that is coming, beyond just that people are back spending money. That "should" only get us back to "normal".
reply